Rydex Investments rang the opening bell on the American Stock Exchange March 7 and introduced six new exchange traded funds, which are factor weighted on either growth or value rather than on traditional market cap size, and all cost 37 basis points.
The S&P/Citigroup Pure Style Indices divide the S&P 500, the S&P MidCap 400, and the S&P Small Cap 600 into sub-indexes designed to specifically track the growth and value portions of each index. Each pure style index holds about one-third of the market cap of the parent index.
The new ETF funds introduced Tuesday are: Rydex S&P 500 Pure Value ETF; Rydex S&P 500 Pure Growth ETF; Rydex S&P MidCap 400 Pure Value ETF; Rydex S&P 400 Pure Value ETF; Rydex S&P SmallCap 600 Pure Value ETF; and Rydex S&P SmallCap 600 Pure Growth ETF.
The growth style indexes measure three dimensions of growth: five-year earnings per share growth rate; five-year sales per share growth rate; and five-year internal growth rate. Conversely, the value style indexes measure: book value to price ratio; cash flow to price ratio, sales to price ratio; and dividend yield.
“We think that it’s a superior methodology in order for an investor or a financial professional to get the exposure that they’re looking for in the small-cap and/or growth or value space,” said Stephen Sachs, director of trading at Rydex.